Property ‘Catch 22’ must not be repeated

THE property bubble was caused in no small measure by financial institutions lending excessive sums to property developers to buy land at hugely inflated prices which led inevitably to these same financial institutions giving mortgages of up to 110% in many cases to house-buyers to enable them to buy the houses built by the developers.

This was a classic Catch 22 situation and should not be allowed to happen again if we ever get out of the mess we are in now.

No institution which finances large-scale property development should be allowed to sell mortgages to home-buyers as these institutions have a vested interest in making sure the developers get the highest price possible for their properties at the cost of the home-buyers.